In 2017 the TRS was established to meet the UK government’s obligations to comply with the fourth and fifth EU money laundering directives, previously only trusts needed to register if the trustees incurred certain tax liabilities but since originally being set up new rules came into effect on 6 October 2020 which means almost all trusts set up (with some exceptions) will have to be registered, even if there is no tax liability.
These are broadly:
- all UK express trusts, unless they are specifically excluded, these are usually in the form of a deed
- non-UK express trusts:
- acquire land or property in the UK
- have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK
If the trust needs a Unique Taxpayer Reference (UTR) for Self Assessment purposes, it must still register to get this, even if it’s highlighted in the exclusion list.
Find more details here of trusts that do not need to register https://www.gov.uk/guidance/trust-registration-extension-an-overview#not-registered
Trusts that need to be registered are described above, you should be aware this registration requirement applies to multiples types of Trust, the following list is not exhaustive but to highlight a few of the possibly lesser known areas it can apply to certain Declarations of Trust made, Life Interest Trusts, Bare Trusts created by Shares being held by a nominee until a minor reaches the age of 18, Will Trusts, some Life Insurance Policies and some Co-ownership trusts. Also, trusts which were in existence after 6 October 2020 but which have since ceased to exist will also need to register.
Where you have a Trust the Trustees are required to register this with the TRS. If you believe you have one and are uncertain if the registration requirement applies please contact the usual executive who deals with your affairs.
Trustees (or their agents on their behalf) must register a trust using the TRS if the trust is liable to pay any of the following taxes:
- Capital Gains Tax
- Income Tax
- Inheritance Tax
- Stamp Duty Land Tax
- Stamp Duty Reserve Tax
- Land and Buildings Transaction Tax (in Scotland)
- Land Transaction Tax (in Wales)
When to register
Trusts that are not taxable
Non-taxable trusts that were created on or before 6 October 2020
The deadline for registrations is on or before 1 September 2022.
Non-taxable trusts created after 6 October 2020
Register your trust within 90 days of it being created or becoming liable for tax, or on or before 1 September 2022 (whichever is later).
Trusts that are taxable
The registration deadline depends on:
- when the trust was created
- the tax the trust is liable for
- if it has been liable for Income Tax or Capital Gains Tax before
Taxable trusts that are created on or after 6 April 2021
Register your trust within 90 days of the trust becoming liable for tax or on or before 1 September 2022 (whichever is later).
Taxable trusts that were created before 6 April 2021
Trusts that are liable for Income Tax or Capital Gains Tax for the first time
Register your trust on or before 5 October in the tax year after the one in which the trust starts to receive any income or has capital gains, and becomes liable for Income Tax or Capital Gains Tax.
For example, if your trust received some interest for the first time in May 2019 (the 2019 to 2020 tax year) and became liable to Income Tax on it, you should have registered on or before 5 October 2020 (in the 2020 to 2021 tax year).
Trusts that have been liable for Income Tax or Capital Gains Tax before
Register your trust on or before 31 January in the tax year after the one in which the trust receives any income or has capital gains, and is liable for tax.
Trusts that are liable for other taxes
Register your trust on or before 31 January in the tax year after the one in which your trust has any other tax liability, like Inheritance Tax.
If your trust is liable for more than one tax and both deadlines could apply, you must register it before the earlier of the 2 deadlines.
If you do not register the trust on time, you may receive a notification letter reminding you of your obligation to keep the register up to date. If you do not keep the register up to date you may be charged a penalty.
